Are there assets that are not distributed by a will during probate?

A will only controls the distribution of probate assets.

A will allows you to nominate a personal representative of your estate and dispose of your probate assets. The personal representative would be in charge of your probate estate at your death. However, a will only controls the distribution of probate assets. Probate assets are assets that do not have a valid beneficiary designation or are not owned jointly with a right of survivorship. Assets that are owned jointly with a right of survivorship or have a beneficiary designation pass to the surviving owner or named beneficiaries outside of probate.

This means a surviving spouse may receive the deceased spouse’s share of jointly owned assets, like the family home and bank accounts, if they were owned with a right of survivorship, without the need for a probate. Spouses generally own assets jointly and name each other as the primary beneficiary on beneficiary driven assets. However, at the surviving spouse’s death a probate may be necessary because there is no longer a joint owner with a right of survivorship on bank accounts and the home.

Assets that may pass by beneficiary designation include life insurance policies, retirement accounts, annuities, certificates of deposit, bank accounts, brokerage accounts, securities, and savings bonds.

Real property owned with another person or spouse that includes a right of survivorship does not go through probate. For deaths on or after January 1, 2012, Oregon law allows a person or persons (transferor(s)) to transfer an interest in real property to named beneficiaries at death, thus avoiding the need for the real property to pass through probate. The deed must be recorded in the county where the real property is located before the death of the transferor(s). The transfer on death deed does not convey a present interest to the named beneficiaries; the grantor is not giving anything away presently. The deed may be revoked any time before the transferor(s) death by the transferor(s) or, if designated in the deed, the transferor’s agent. When the real property is owned jointly by more than one owner, and every owner signs the transfer on death deed, ownership is only transferred to the named beneficiaries at the surviving transferor’s death. The real property is transferred to the named beneficiary/beneficiaries subject to any liens, encumbrances, or claims. As with a testamentary document, special care must be taken in drafting the transfer on death deed to ensure the desired outcome is achieved.

An experienced Probate and Estate Planning attorney can help you understand who will receive your assets after you die and explain your options to ensure the outcome you desire. Contact the probate and estate planning attorneys with the Law Offices of Nay & Friedenberg in Portland, Oregon at (503) 245-0894 to set an appointment.

If you would like to learn more about the probate process, click here to receive our FREE Legal/Financial Planning Guide.